United fears laid bare

Last updated : 14 January 2010 By Manchester Evening News

Supporters have been shaken to core by financial results released on Monday, which laid bare the crippling affect the club's mammoth £700m loan is having on Old Trafford.

With United now seeking £500m investment in the form of bonds, they have been forced to reveal the risks associated with buying into the club.

Primary among them is the fear that Sir Alex Ferguson's impending retirement will prompt a downturn in performance and a failure to attract and retain top players.

United's hierarchy have also pointed to the likes of mega-rich rivals like City and Chelsea as major threats to their continued dominance, while possible UEFA regulations on debt could limit our ability to acquire or retain top players.

The risks have been included in 322-page document distributed to potential investors as United look to issue the £500m of bonds that would considerably ease the debt taken on by the Glazer family when controversially buying the club in 2005.

It is standard procedure to lay out any risks associated with potential investments and the points highlighted can be considered worst case scenarios.

Also included is the threat of terrorism when United travel abroad or indeed on home soil at the iconic Old Trafford, described as a potential target.

But with United's concerns laid out in black and white, they will only fuel the fears of supporters still stunned by Monday's results.

Despite a year in which the club won the Premier League, Club World Cup and Carling Cup, while reaching the Champions League final and semi finals of the FA Cup, they still relied on the world record £80m sale of Cristiano Ronaldo to avoid announcing a loss of £31.8m.

They also enjoyed a healthy increase in matchday, media and commercial revenue, but still only made a profit of £48.2m. And the fact they made interest payments of £42m on a £509m loan demonstrates just how much of a burden their debts have become.

Experts say the bond issue will be attractive to investors and a sound business move for the club.

But it has also forced to United to face some grim possibilities.

Potential investors would obviously want to know what the future holds beyond Ferguson.

Any successor to our manager may not be as successful as he has been, the document bluntly reads. A downturn in the performance of the first team may adversely affect our ability to attract and retain such coaches and players.

Regarding the threat of City and Chelsea, it adds: In the Premier League, recent investment from wealthy team owners has led to teams with strong financial backing. The increase in competition could result in our first team finishing lower in the Premier League than we have in the past and jeopardising our qualification for or results in the Champions League.

Such comments will make chastening reading for supporters. But should the document have the desired effect in attracting £500m of fresh investment it will already be a sizeable step in ensuring such fears do not become a reality.